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Chip Industry &quot;Threatened&quot; by Chinese Players

China's aggressive moves to build their own chip capabilities could cause a supply glut and disrupt the chip industry, as long as they gain access to the related IP.

China's government-backed entities such as Hefei Chang Xin and Tsinghua Unigroup-controlled Yangtze River Storage Technology, known as Changjiang Storage, aim to start making memory chips as early as 2018.

Of course, producing memory chips requires not only strong investments in chip facilities but also access to the required intellectual property, which is currently held by major memory chip players outside China. If Chinese manage to license technology from key global chipmakers, the sector "could go from healthy competition to battles that could lead to out-of-control and disruptive outcomes," according to Lee Pei-Ing, the head of major Taiwanese memory chipmaker Nanya Technology, which is a key partner Micron Techology.

DRAMs are used almost in any all electronic devices, including PCs and smartphones. Processors and displays are also essential parts of may devices, and Chinese companies are also investing in the design and manufacturing of those components. Adding to the mix a sufficient DRAM supply could pose a serious threat to global established market players

Speaking to reporters at a Firday press conference after the company's annual general meeting, Nanya's executive also voiced concerns about Chinese companies' ongoing efforts to poach talent from other companies.

Meanwhile, Nanya Technology and its key partner Micron both have confirmed that Chinese rivals have been luring engineers away from their Taiwan operations. Nanya is working with authorities to investigate whether their former employees are leaking technology to Chinese competitors.

Besides memory chips, Chinese have been also invested in other sectors, including displays, LEDs, solar panels and steel, a situation that has already led to oversupply.